Under your leadership, a great deal was accomplished to improve the economy and quality of life for the citizens of Ohio including the residents of our 29 county Appalachian region of eastern and southern Ohio. While much of this region continues to face levels of poverty and economic and social distress that are above state and national averages, statistics that were often in double digits are now typically well below 10%. In particular, Jobs Bills I, II and III continue to positively impact the state's economy and overall fiscal well being. In Appalachia, the focus on developing rural industrial parks in Jobs Bill III has had a significant impact on the ability to attract new industry into the region. This, coupled with the resources of the First Frontier Program enable our communities to more successfully market these sites to the rest of the country and the world.
Of course, it is my fervent belief that the ARC program is at the core of much of the progress that has been made in Ohio Appalachia. The "bottom up" process of ARC funding coupled with the wide array of eligible activities that can receive assistance truly does make it an intergovernmental model that has not only proven to be extremely successful but I believe is worthy of emulation in other geographic areas of distress in the country. While the program's funding levels have never been very high (Ohio's non-highway ARC funding has averaged approximately between $4 to $4.5 million per year during the last decade), it has, nonetheless, been able to leverage significant amounts of other federal, state, local and private sector support. Indeed, ARC requires some level of matching funds in virtually all of the projects in which it is involved. (ARC can fund up to 80% of a project in a Distressed County and no more than 50% of a project in a Transitional County. Ohio presently has 9 Distressed Counties and 19 Transitional Counties. Clermont County is defined as a Competitive County and therefore eligible for no more than 30% of ARC funding for a given project.) This requirement has enabled a little bit of ARC money to go a long way.
ARC policy provides each of the 13 Appalachian states and their governor a great deal of discretion in developing priorities and determining how ARC funding will actually be spent. Ohio, I believe, has one of the best systems in place to make those decisions. Through the direction of the Governor's Office of Appalachia (GOA) and its coordination with Ohio's 3 Local Development Districts (Buckeye Hills-Hocking Valley Regional Development District in Marietta, the Ohio Mid-Eastern Governments Association in Cambridge, and the Ohio Valley Regional Development Commission in Waverly) the spending of the vast majority of Ohio's ARC allocation is determined in large part through decision making at the local level. This is accomplished through the Board of Directors of each of the Local Development Districts (LDDs) which are primarily made up of elected local officials.. While the process varies with each LDD, each Board of Directors ultimately prioritizes its projects and submits them to GOA. At that point, the LDDs meet with GOA to determine the state's project funding priorities for a given federal fiscal year.
This structure helps to "depoliticize" the project selection process and makes it more objective in nature. It supports the logic that local officials know best as to what their needs and priorities are . With limited funding from ARC and other federal and state sources, the process also takes advantage of LDD staff expertise in helping to coordinate the overall funding package of any given project. As a result, those projects which have most of the funding "pieces" in place and have been identified as priority projects for ARC consideration can be moved ahead in a timely fashion.
The flexibility of ARC funding also compliments the locally driven decision making process of the program. The following 5 goals that were adopted by ARC provide an overall umbrella that is used to determine project eligibility:
-- GOAL ONE: Appalachian residents will have the skills and knowledge necessary to compete in the world economy in the 215' century.
-- GOAL TWO: Appalachian communities will have the physical infrastructure necessary for self-sustaining economic development and improved quality of life.
-- GOAL THREE: The people and organizations of Appalachia will have the vision and capacity to mobilize and work together for sustained economic progress and improvement of their communities.
-- GOAL FOUR: Appalachian residents will have access to financial and technical resources to help build dynamic and self-sustaining local economies.
-- GOAL FIVE: Appalachian residents will have access to affordable, quality health care.
As can be seen, many types of activities can be accomplished within the parameters offered by these goals. Again, it is then up to the states and the local and regional partners within each state to develop their strategies and ideas to ultimately determine what their funding priorities will be.
While the ability to fund many types of projects is critical, it is also important to note that the administration of the ARC program by the agency's staff and the Federal Co-Chairman's office is not done in a manner that many would consider to be "typical Washington bureaucracy." ARC has shown that it is a program that seeks to simplify rather than to complicate. It does not try to operate under a rigid or lengthy review and approval process that in many other programs tend to frustrate and confuse the applicant. Indeed, perhaps the most important thing that I can add in this regard is that ultimately ARC operates with a programmatic mindset that seeks to find ways to work with the states in order to get their priorities funded. It does not search for ways to turn applicants away.
The flexibility of ARC can also be seen in the structure of the LDDs. These organizations were established through the Appalachian Development Act of 1965 as the "local partner" in the ARC intergovernmental model. At present, there are 71 LDDs covering 406 counties within the 196,000 square miles that make up the 13 state Appalachian region. With administrative financial support from ARC, each LDD serve as a "convener" of local governments and organizations within the area that they serve. Each organization seeks to "assess, plan, and facilitate action within their locality in efforts aimed toward achieving the quality of life enhancement goals of the ARC."
In addition, however, each LDD has its own particular role and function within the area that it serves. In Ohio our 3 LDDs are involved in numerous activities that seek to address economic and social concerns that impact the counties and communities that make up their district. These activities include the administration of Revolving Loan Fund programs for small to medium sized business. In Ohio Appalachia, ARC funds coupled with those from the Economic Development Administration has resulted in almost 150 loans totaling over $8 million which has brought about the creation of approximately 1,600 jobs.
Ohio's LDDs are also involved in international trade activities that seek to encourage business and industry in the region to become more involved with world markets. This not only involves direct counseling but also includes participation in various trade events and activities that help to benefit local companies. Buckeye Hills, OMEGA and OVRDC (Ohio's 3 LDDs) have each been designated an International Trade Assistance Center by Ohio's Small Business Development Center (SBDC) program.
Another important function the LDDs have been involved with is supporting the development of intermodal transportation plans that would bring about increased economic development for our region. Various projects have involved highway and rail enhancements along with a project that would seek to better utilize the Ohio River for the shipment of products. This project has received ARC funding of over $50,000 and seeks to bring together public and private sector parties from Kentucky, Ohio, Pennsylvania and West Virginia to develop a regional marketing strategy that would attract industry that would benefit from using the Ohio River as a transportation corridor.
Other activities that involve one or more of Ohio's 3 LDDs include: administration of the Ohio Public Works Commission programs, administration of an Area Agency on Aging program, participation in SBDC counseling for those interested in starting their own business, grantsmanship training and counseling for public agencies and non-profit organizations, serving as a census and demographic affiliate for the Ohio Department of Development and providing GIS services to member governments and other interested parties.
As can be seen, the LDDs play a varied but important role in each of the districts that they serve in Ohio Appalachia. With guidance and direction from their Board of Directors, each LDD seeks to fill gaps and voids in support and services that many of our communities in Appalachia need but simply do not have the financial or human capacity to accomplish.
In conclusion, it is my hope that this testimony has helped to shed some light on important role that ARC plays in sustaining a unique but most needed local, state, and federal partnership that means so much to many areas of this nation's Appalachian region. While it is not without wart or blemish, the program has a proud history of meaningful accomplishment throughout its 35-year history. It has proven to be an effective program that has been a worthwhile investment of public resources. However, while much has been accomplished, there is still much more that needs to be done to help improve the quality of life for much of the Appalachian region.